Crazy Eddie Case Analysis Essay

The second ethical problem in this case relates to the Rigas family’s use of publicly-held corporate funds as a personal “piggy bank.” The Rigases used the company jet for personal reasons “without approval of the Board of Directors”, on one occasion flying to Africa for a safari (Markon & Frank, 2002). On another, one of John Rigas’ sons used a corporate jet to pick up an actress friend of his (Grant, Young, & Nuzum, 2004). The former CFO claimed that Adelphia’s funds were used by one of Rigas’ sons to buy a condominium, and to build a $13M golf course (Grant, Young, & Nuzum,

There are laws in place to reduce the chances of an employer firing an employee based on their race, gender, disability, or sexual preference. Throughout the scandal, Kozlowski fired multiple employees without any warning or write up when he discovered that some of the revenue goals were not met after a company was acquired or they merged with another organization. Besides that, anyone whom gave a negative review or spoke negatively about Tyco had a strong possibility of being fired by Kozlowski. David Tice was vilified by Kozlowski for short selling Tyco. He worked for Prudent Bear and was only doing his job when he spoke out negatively about Tyco’s use of large reserves during acquisitions. That’s not the only instance, Jeanne Terrile, a former employee of Tyco was removed from covering Tyco as an analyst for Merrill Lynch because she refused to upgrade Tyco after the rapid amount of acquisitions and mergers. Also, the way Kozlowski handled his employees can be seen as over stepping his boundaries as CEO. He abused his legitimate power by treating the followers unfairly if he did not like the way business was being conducted or the company’s profits were not where they were supposed to be. Kozlowski implemented expert, legitimate, and coercive power to influence the outcomes he wanted and to get rid of any subordinate or analyst portraying Tyco in a

Read ATC 7-5 in Chapter 7. This situation is very similar to what a company called Enron did several years ago. Use the internet or the university library to research exactly what Enron did in their accounting procedures and what eventually happened to the company. Post your findings and understanding of Enron’s story and respond to two other students’ postings with enhancements or additions to the Enron situation.

You have been employed as an entry-level management accountant for a little under a year. You suspect that your immediate supervisor is involved in a significant fraud involving diverting of company assets to personal use. Briefly describe the steps you might take to resolve this dilemma and use a real world example (not hypothetical) to support your approach.

Also we know that Daniel Berman was the Finance Director at the company. His issue was he felt some of the accounting practices violated SEC regulation. By relaying the information to a senior officer, he is considered a whistleblower. As the Finance Director, all dealings in the finance/accounting department(s) fall on him whether right or wrong. I believe he was justified in relaying the information based on how it could eventually negatively affect the company. With him being terminated, he decided to sue his former employer and the case was dismissed in the United States District Court for the Southern District of New York. As a result of the case being dismissed it was then filed with the United States Court of Appeal Fifth Circuit and ruled the judgment reversed and case remanded. Under Sarbanes-Oxley, Berman is protected because he was retaliated against for reporting suspected corporate fraud. In this case, Berman sued on the basis of the retaliation policy in Dodd-Frank related to the definition of a whistleblower in Sarbanes-Oxley. Dodd-Frank and Sarbanes-Oxley are so similar that either way he was protected in his

In trying to identify the agents that were paid off by SNC, the board members found that they were unable to contact some of the agents or to identify their true identity. This breach in the company accounting ethics occurred as a result of material weaknesses in the company's internal controls over their financial reporting which allowed the CEO to sign off on these transactions without informing the company chief

One would assume that they should have brought a new person in to do the audit but then that person would have been on the job at the beginning of the scandal and carried it through until the very end.

Firstly there is a significant Ethical and morale lapse in a share floated company when the CEO engages in related party transactions. The moral issues arise

(3) 1984-1987: As a public company, overstating income to help insiders dump stock at inflated prices using a variety of fraudulent

The fiduciary duty to shareholders is also present in common law as a duty amongst two people committing a transaction, where “one who fails to disclose material information prior to … a transaction commits fraud only when he is under a duty to do so” (445 U.S. 229). It then describes that duty as a result of “a fiduciary or other similar relation of trust and confidence between them” (445 U.S. 229). The importance of this fiduciary duty is clear, and it is uncontested that Maher Kara owed that duty to Citigroup. By disclosing confidential information to anyone, much less his brother, Maher Kara was in violation of that duty.

The Fraud Examination Team conducted due diligence background checks on both Mr. Eddie Antar and Mr. Sam E. Antar by checking on-line and other records, reviewing financial statements of Crazy Eddie, interviews of key participants and Crazy Eddie employees who we believed may have information regarding the alleged fraudulent activities.

The ethical issue within this case study involves “the CEO” (e.g., Don Chambers) wanting “the CFO” (e.g., “Ron Smith”) to violate the law by manipulating forecasted predictions and quarterly data to show the firm’s performance as being superior to market expectations (Brooks & Dunn, 2015, p. 210). To further explain, Don got into a heated argument with Ron over quarterly numbers not matching up with the expectations of “market analysts” due to an unexpected slump in sales and profit margins (Brooks & Dunn, 2015, p. 210). Don is concerned that the firm’s performance not reaching the financial forecasts he set forth as an executive, as well as those predicted by analysts will do damage to both his and the firm’s reputation when quarterly and

1. Does The Brownie Baker use a differentiation or a cost leadership strategy? How can you tell?

In the Countrywide Financial case, several ethical issues contributed to the downfall of the organization. I will describe the ethical issues observed in the case.

1. a) Since the treasurer diverted a substantial amount of the fund’s earnings to his personal use and systematically underrecorded income earned, we could consider this as a financial reporting fraud. The auditor would have identified the risk primarily through analysis of financial results and review of operational procedures.